Fed asset purchases, in place for 15 months now, have weakened the dollar by depressing interest rates to spur on economic recovery.
In U.S. trading on Wednesday, EUR/USD was down 0.21% at 1.3738.
The Federal Reserve on Wednesday left its key benchmark lending target, the fed funds rate, unchanged at 0.0-0.25% but said it was cutting the amount of Treasury holdings and mortgage debt it buys from banks each month to USD75 billion from USD85 billion.
However, the Fed said overall monetary policy, including interest rates at rock-bottom levels, will stay accommodative until the unemployment rate dips below 6.5%, a figure previously seen as the threshold at which the U.S. central bank would rethink policy.
The Fed added it could beef up its asset-purchasing program should recovery gain steam or deteriorate.
"If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings," the Fed's policy statement said.
"However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases," the Fed added.
"The Committee now anticipates, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5% percent, especially if projected inflation continues to run below the Committee's 2% longer-run goal," the Fed said.
Elsewhere, the Census Bureau reported earlier that U.S. housing starts rose to 1.09 million units in November from 890,000 in October, beating consensus forecasts for an increase to 950,000 units.
Building permits in the U.S. fell 3.1% to 1.01 million units in November, from 1.04 million units the previous month.
Still, analysts were expecting building permits to drop 4.7% last month.
The euro showed little reaction after the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
Elsewhere, the greenback was down against the pound, with GBP/USD up 0.97% at 1.6422.
The pound shot up after data revealed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low of 7.4% in the three months to October, fueling hopes that the Bank of England will raise interest rates ahead of other central banks.
Analysts were expecting a 7.6% reading.
The dollar was up against the yen, with USD/JPY up 0.95% at 103.65, and up against the Swiss franc, with USD/CHF up 0.46% at 0.8891.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.49% at 1.0660, AUD/USD down 0.44% at 0.8860 and NZD/USD trading down 0.48% at 0.8232.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.16% at 80.34.
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